Audit reveals problems with county's budget, inventory and financial controls

OKLAHOMA — A state audit — which revealed “fairly large discrepancies” in a Cleveland County employee’s time sheets — also shows several other problems with the county’s budget, inventory and financial controls.

Released July 6, that audit — performed by State Auditor and Inspector Jeff McMahan’s office — lists four other findings, in addition to problems with the county employee’s time sheets.

Those problems range from improperly prepared financial documents, to shortages and excess inventory of county signs, and a shortage of almost 500 gallons of gasoline.

Terri Watkins, spokesman for state auditor Jeff McMahan, said the audit was “routine” and performed when new county officials are seated.

“There were some items that were brought to us,” she said. “And those were included in this audit.”

County commission chair George Skinner could not be reached for comment.

Among the audit’s findings were:
• The county “does not prepare financial statements in conformity with generally accepted accounting principals” as required by state law.

McMahan’s office recommended the county “prepare financial statements in conformity with generally accepted accounting principals as required by counties who have adopted the state’s County Budget Act.

Cleveland County adopted the act, but has not prepared its financial documents properly.

In their reply to the audit, county officials acknowledged the problem but said they were unable to comply do to financial problems. “…management is aware of this situation; however, due to financial situations we are unable to comply with this situation at this time. We are currently in the process of correcting this situation to comply with state statutes.”

• The county Sheriff’s office did not segregate duties involved with asset custody, transaction authorization, bookkeeping and reconciliation.

“Segregation of duties over asset custody, transaction authorization, bookkeeping and reconciliation is an important element of effective internal control over government assets and resources,” the auditor said.

The auditor’s office recommended county officers “be aware of this condition and realize that concentration of duties and responsibilities in a limited number of individuals is not desired from a control point of view.”

The recommendation continued saying, “…the most effective controls lie in management’s knowledge of office operations and a periodic review of operations.”

County officials agreed with the auditor’s findings, adding that “management does have knowledge of office operations and will perform a periodic review of these operations.

• The Sheriff’s Inmate Trust Account was not properly reconciled with the bank statement at June 30, 2006.

“Failure to perform tasks that are part of internal controls, such as reconciliations not prepared or not timely prepared are deficiencies in internal control,” the auditor’s staff writes. “Further, reconciliations should be performed on a monthly basis.”
County officials again agreed with the finding and said “management has implemented procedures to correct this issue.”

• State auditors could not trace six deposits for the Sheriff’s Inmate Trust Account to receipts:

1. A $50 check dated July 6, 2005.

2. $12.70 in cash from Aug. 10, 2005.

3. $77.66 in cash from Sept. 7, 2005.

4. A $1.11 check dated Sept. 7, 2005.

5. $8 in cash from Jan. 18, 2006.

6. $120.04 check dated Jan. 18, 2006.

“We recommend that all monies collected under the color of office be receipted and deposited daily,” the auditor wrote. “We further recommend to enhance effective accounting procedures, the County Sheriff’s office list a receipt number or inmate’s name on the deposit slip for all cash deposited.”

In their reply, county officials agreed with the state’s findings and said they had implemented procedures to correct the issue.
• Varancies existed between the county’s consumable sign inventory and actual counts of those signs.

The signs — 42 different ones — were listed as having either an excess number on hand, or having fewer than the listed amounts.

In addition, the audit reported more tinhorns than listed on the county’s inventory and a shortage of 473.98 gallons of gas.
The audit also showed the county with more 434.34 gallons of diesel fuel than listed.

Both the signs and the fuel were listed as part of the District 3 inventory.

An inventory of District 1 showed an excess of 8.42 gallons of gasoline and 37.59 gallons of diesel fuel as compared to the county’s inventory.

Watkins said the audit would be turned over the Cleveland County District Attorney Greg Mashburn’s office. Friday, Mashburn said once the document was received, his office “would definitely be reviewing it.”